RH (RH) Q1 2026 earnings summary

Executive summary

• Revenue grew 12% year-over-year in Q1 to $814 million, with net income of $8 million compared to a net loss of $3.6 million in the prior year period.

• Adjusted operating margin reached 7% and adjusted EBITDA margin 13.1%, both at the high end of expectations.

• Free cash flow was $34 million for the quarter.

• Significant share gains and strategic separation achieved through investments in product and platform elevation.

• European business accelerated, with RH England gallery demand up 47% and online up 44% year-over-year.

Financial highlights

• Net revenues: $813.95 million, up from $726.96 million year-over-year.

• Net income: $8.04 million, reversing a net loss of $3.63 million in the prior year.

• Adjusted EBITDA: $106.44 million, up from $89.13 million.

• Gross margin improved 20 basis points to 43.7%.

• Free cash flow of $34 million in Q1.

Outlook and guidance

• Fiscal 2025 guidance: revenue growth of 10-13%, adjusted operating margin of 14-15%, adjusted EBITDA margin of 20-21%, and free cash flow of $250-$350 million.

• Q2 2025 guidance: revenue growth of 8-10%, adjusted operating margin of 15-16%, adjusted EBITDA margin of 20.5-21.5%.

• Adjusted capital expenditures for fiscal 2025 are expected to be $275–$325 million, focused on new Design Galleries and infrastructure.

• Tariff disruptions expected to reduce Q2 revenue by ~6%, with recovery anticipated in the second half.

• Launch of a new brand extension delayed to spring 2026 due to tariff uncertainty.